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Abstract
In recent years global general equilibrium (GE) models have been used to analyse policy issues
such as trade liberalisation, regional integration and environmental policies. While a global
CGE model is an excellent tool to perform a comprehensive analysis of such policies, it requires
an enormous amount of data to calibrate or parameterise the model itself. Quality differences in
the data sets might affect the results of the model simulation. Identifying and removing
problems in the database is an important task for the effective use of a CGE model.
In this paper, we suggest an approach to detect and remove major inconsistencies from the
database of a CGE model. To illustrate, we examine and modify selected interindustry
transactions in the GTAP version 5 database, a general equilibrium database of the global
economy. The revised database was evaluated against the original by undertaking technical
change and trade liberalisation experiments using Global Trade Analysis Project (GTAP)
model. Results show that estimates using the modified database are more credible than those
from the original database.